AQMD Board Votes to Shelve Anti-Smog Plan

The Southern California air quality board voted unanimously Friday to mothball an expanded version of its innovative pollution trading market, leaving it without a strategy for complying fully with federal clean air rules.

The move marks the latest in a series of conciliatory gestures by the South Coast Air Quality Management District board toward a business community that is newly emboldened by the anti-regulatory zeal of the Republican-controlled state Assembly.

At the same time, the new pollution trading plan had few friends among environmentalists who faulted it for being too lenient in setting annual emission limits on businesses.

“It’s a program that has suffered from a lack of support on all sides,” said Jon Mikels, the AQMD board chairman and a San Bernardino County supervisor.

The board’s vote leaves the district without a plan in place to meet its goal to cut smog levels by reducing the emissions of volatile organic compounds in half by 2005. The goal must be met, district officials believe, in order to comply with state and federal clean air mandates.

Previously the district had estimated that, over the next two years, a market in pollution credits for volatile organic compounds would eliminate up to 20 tons a day of the pollutants.

The original market in pollution credits, known as RECLAIM, is in use by more than 300 firms in Los Angeles, Orange, Riverside and San Bernardino counties. It allows companies that emit nitrogen dioxide and sulfur dioxide to trade pollution credits.

In its expanded phase, RECLAIM would have created a similar market for about 1,000 more companies that release the organic compounds. A market in the compounds was initially seen as an alternative to burdensome regulation of emissions from chemical processes commonly used by aerospace plants, electronics manufacturers, printers, furniture makers, auto body shops and other businesses.

Without the market for the organic compounds, companies leave themselves open to an industry-by-industry regulation that in the past has proved costly and time-consuming.

“If we are going to abandon market forces, we are going to have to return to some kind of command and control,” said Marvin Braude, a board member and a Los Angeles City councilman. “All free enterprise requires some kind of regulation.”

However, during 1995 the district adopted only two of 28 proposed rules, and industry representatives are counting on that trend to continue, especially with the recent election of Curt Pringle, an Orange County Republican, as Assembly speaker. Pringle has said he would like to see the district abolished.

Last year, the air district relaxed five regulations, abolished its ride-sharing requirement and approved $3.1 million in rebates on permit fees to regulated businesses.

And as part of his annual statement of future goals for the district, Mikels called for cutting the size of the agency 50% by the end of the century. The agency employs 785 people, a 30% reduction from three years ago, and has a $97.4-million annual budget.

In opposing the proposed market for credits, business representatives have made it clear they still embrace the idea of pollution trading. Moreover, they encouraged the board to move toward adopting a more flexible market for organic compounds that would allow even more companies to participate and would not impose strict limits on emissions.

Los Angeles lawyer Robert Wyman, representing a coalition of 14 corporations opposed to the expanded RECLAIM, said the system as proposed would have been “a market of all buyers and no sellers”.

He said that meant firms would not have had pollution credits to sell because none has the technology to meet the organic compound limits imposed by the plan--at least not without holding production levels close to recession levels.

The coalition represented by Wyman includes Hughes Electronics, the Los Angeles Times, McDonnell Douglas, Northrop Grumman, TRW and Walt Disney Co.

Wyman said that most of the companies eligible for a market in organic compound trading have been subject to regulation for many years. Moreover, he said, these companies have cut compound emissions in half since 1989.

On the other hand, Pat Leyden, who is in charge of the ongoing RECLAIM program, said that since 1993, the district had fallen 60% short of its organic compound reduction goal.